Summary
Development financing to Southeast Asia is set to drop by over $2 billion in 2026 due to funding cuts by Western countries. This reduction will impact poorer nations and essential areas like health and education. China, Japan, and South Korea are expected to play larger roles in providing development assistance in the region.
Key Facts
- Development aid to Southeast Asia will decrease from $29 billion in 2023 to $26.5 billion in 2026.
- Before the COVID-19 pandemic, the average development aid was $33 billion.
- Bilateral funding will reduce by 20%, going from $11 billion in 2023 to $9 billion in 2026.
- Western countries, including Europe and the UK, are redirecting funds to increase defense spending amid the Russia-Ukraine conflict.
- The US has cut foreign aid significantly, with reductions planned by other Western countries totaling over $17 billion between 2025 and 2029.
- China, Japan, and South Korea are expected to increase their development assistance efforts in Southeast Asia.
- China's aid focuses on infrastructure like railways and ports, benefiting richer Southeast Asian nations.
- Japan and South Korea have begun to support governance and civil society projects, such as democracy and women's protection initiatives.
